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Threadneedle move widens access to its property fund

Threadneedle Investments has moved its property fund offshore in a bid to make it available to a wider audience.

Formerly the Sackville property unit trust, the fund is being relocated from the UK to Jersey.

In its previous incarnation as an unauthorised exempt UK unit trust, only UK pensions and charities were able to invest in it. It will now be open to direct investors with a minimum investment of £250,000, which decreases to £25,000 for clients of recognised financial advisers.

The fund has no initial charge but there is an annual charge of 1.25 per cent, with renewal commission of 0.5 per cent. There is a bid/offer spread of around 7.5 per cent.

Threadneedle has £3bn of real estate assets under management spread across 4,000 properties.

Threadneedle Property Investments director Don Jordison says: “We believe that property is still an attractive asset class. The yield on the Investment Property Databank index is 7 per cent – higher than the gilt market or investment-grade bonds.

“We are pragmatic investors. We avoid greenfield development and flagship offices. We prefer to locate a sound spread of buildings, both industrial and commercial, which we can buy on attractive terms and whose value we can enhance by careful investment.

“What has damaged property values in previous cycles has been excessive speculative development. This has resulted in a bulge of unlet buildings which has ruined valuations. But this has not hap- pened in recent years. All the excess capital seems to have been wasted on telecommunications networks instead. This means we should be moving into an economic recovery with little development in the pipe-line, which bodes well for the protection of capital and should provide good prospects of sustainable returns.”

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